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Monday, March 26, 2012

Constitution (Ninety Seventh Amendment) Act 2011 relating to the co-operatives will encourage economic activities of cooperatives which in turn help progress of rural India. It is expected to not only ensure autonomous and democratic functioning of cooperatives, but also the accountability of the management to the members and other stakeholders.

The inter alia provides for:

(i) incorporation, regulation and winding up of cooperative societies based on the principles of voluntary formation, democratic member control, member economic participation and autonomous functioning;

(ii) specifying the maximum number of directors of a co-operative society to be not exceeding twenty-one members;

(iii) a fixed term of five years from the date of election in respect of the elected members of the board and its office bearers; and an authority or body for the conduct of elections to a cooperative society;

(iv) a maximum time limit of six months during which board of directors of a co-operative society could be kept under supersession or suspension;

(v) independent professional audit;

(vi) right of information to the members of the co-operative societies;

(vii) empowering the State Governments to obtain periodic reports of activities and accounts of co-operative societies;

(viii) reservation of one seat for the Scheduled Castes or the Scheduled Tribes and two seats for women on the board of every cooperative society, which have individuals as members from such categories; and

(ix) penalties in respect of offences relating to co-operative societies.

The constitution amendment is clear. The reservation for SC/ST and women is mandatory to the cooperative societies in which there are members of such category. The land mark judgment in Zorastrian Cooperative Housing society has nothing to do with this amendment. In that judgment, it was held that, cooperatives can restrict their membership to particular community.